Three Shares That Beat the Market Today

The Straits Times Index (SGX: ^STI) has inched up slightly by 0.1% to 3,266 points. Within the index’s 30 constituents, 11 shares had managed to make some headway during the trading session while the same number of shares had made some losses.

One of the biggest stories in Singapore over the past two days has been the announcement of the changes that the government has made to the public bus service industry. The two public bus service operators in Singapore, SBS Transit (SGX: S61) and SMRT Corporation (SGX: S53), both saw strong gains today in reaction to those changes; SBS Transit’s shares had jumped by 13.1% to S$1.60 while SMRT’s had moved up by 3.1% to S$1.47.

One of the most pertinent changes for the bus service providers under the Land Transport Authority’s new “Contracting model” would be the fact that the government would become the owner of any assets (i.e. buses) and infrastructure that’s needed for the bus industry. The operators would be solely in charge of providing a service, instead of having to invest in assets and infrastructure as they had done so under the old model.

Despite the possibility that more competitors would enter the picture due to the lower cost of entry into the industry, it seems that the changes would likely benefit both companies – like my colleague Stanley Lim mentioned, “[t]he most obvious benefit for the operators in the new model is that they will save on capital expenditures that were previously required.” This could free up capital that could be used for other purposes to reward shareholders. In any case, the market has given its two-thumbs-up, judging from the share price increases of both companies.

Elsewhere, dental and healthcare outfit Q&M Dental Group (SGX: QC7) had ended the day with a 5.4% gain to S$0.485. Shares of Q&M are currently halted from trading after the company requested for one at 1:36pm due to a “pending release of announcements.” No other information regarding the possible announcements has been given.

Just last week, the company had released a strong suite of results for its first quarter earnings. Quarterly revenue had spiked by 28% year-on-year to S$19.5 million while profits grew even faster at 37% to S$1.53 million. The company’s total number of healthcare outlets had grown from 56 a year ago to 64 currently. Part of that increase had been due to acquisitions and those have paid off, judging from the company’s top- and bottom-line growth.

In the earnings release, Q&M mentioned it is “certain that there is still room for growth locally given the continual increase in revenue from our Singapore operations over the last few years.” With more than 95% of the company’s sales coming from Singapore, that piece of news might be music to investors’ ears. In any case, the company also earmarked its expansion into China as a “significant part of [its] future performance” and that’s something investors could look out for too.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Chong Ser Jing doesn’t own shares in any companies mentioned.